TaxTMI 
TaxTMI 
2019 (1) TMI 1859
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....The prayer in the petition is to quash the proceedings in SC. No. 92 of 2016 against him. 1(b). The petitioner in Crl. P. No. 11942 of 2018 by name Mr. BP Acharya, IAS Officer is A. 13 in SC. No. 2 of 2018 on the file of learned Principal Judge for CBI Cases-cum-Special Court under PML Act, 2002 at Nampally, Hyderabad, which is in ECIR. No. 9/HYZO/2011 of Directorate of Enforcement, taken cognizance for the offences allegedly committed under Sections 4 r/w 3 of PML Act in the prosecution maintained by the complainant Director of Enforcement through its Assistant Director, Ministry of Finance, Department of Revenue, Hyderabad. The prayer in the petition is to quash the proceedings in SC. No. 2 of 2018 against him. 1(c). The petitioner in W.P. No. 2253 of 2018 by name Mr. Adityanath Das, IAS Officer is A. 10 in SC. No. 2 of 2017 on the file of learned Principal Special Judge for trial of CBI Casescum- Special Court under PML Act, 2002 at Nampally, Hyderabad, which is in ECIR. No. 9/HYZO/2011 of Directorate of Enforcement, taken cognizance for the offences allegedly committed under Sections 4 r/w 3 of PML Act in the prosecution maintained by the complainant Director of Enforceme....
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....from the IAS officers from the rank of Principal Secretary level officers and the other directors of APIIC Limited are Principal Secretary (Finance), Principal Secretary (Industries), Principal Secretary (Roads & Buildings), Member Secretary (Pollution Control Board) apart from other non-official members; that as many as 105 proposals of SEZ were sent for approval of Government of India of which 74 were notified; that in the SEZ M/s. Aurobindo Pharma Limited and M/s. Hetero Drugs Limited applied for allotment as anchor clients; that other Pharma companies applied for lease too; that in Jadcherla about 950 acres was for SEZ; that the application for allotment of land was received on 17.11.2006 from M/s. Hetero Drugs Limited and M/s. Aurobindo Pharma Limited and on the same day 'In Principle' offer letter was issued to them as the 10% of EMD was also paid by them. When enquired about development of Green Industrial Park/SEZ at Jadcherla, he stated that in Jadcherla is a backward area in Mahaboob Nagar District; that APIIC acquired 955 acre of land in 2004-05 under the Industrial Growth Centre Scheme of Government of India; that in collaboration with the Green Business Centre ....
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....his procedure was unanimously decided by the Board of APIIC Limited, when enquired about the procedure of fixation of price for allotment of lands in various industrial areas developed by APIIC Limited, Shri Acharya stated that the price fixation committee comprising senior officers of APIIC Limited headed by the Executive Director, is an internal committee appointed by the Managing Director of APIIC, to recommend benchmarks for price fixation, duly considering land cost, development cost of external & internal Infrastructure such as approach road, internal roads, water & power supply, effluent disposal, compound wall, etc.; that Price Fixation Committee is only a recommending body, the Board of APIIC has delegated full powers to the Managing Director regarding fixation of price for sale of land in the very first resolution passed in January, 1974; that more often than not, the Managing Director uses the price recommended by price fixation committee as an indicative price and takes a decision about the price keeping in view several factors such as current state of development of internal/external infrastructure, importance of investment and the possibility of attracting further inv....
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....as not finalised for the said company and other Pharma companies such as M/s. Glochem applied for allotment apart from other companies; that the Plot Allotment Committee did not look into allotments in SEZs and thus there was no need to place the allotments to plot allotment Committee for the allotment of lands to M/s. Hetero Drugs Limited and M/s. Aurobindo Pharma Limited. When enquired about basis for allotment of land of 75 Acre each to M/s. Hetero Drugs Limited and M/s. Aurobindo Pharma Limited without any justification for such huge lands, Shri Acharya stated that based on the investment plans presented by M/s. Hetero Drugs Limited and M/s. Aurobindo Pharma Limited, wherein they planned to invest around Rs. 500 Crore each with global tie up, they had requested to allot 125 acre of land each in the 250 acre SEZ at Jadcherla; that, in order to maximize returns to APIIC by allotting to other investors in future at higher rate, a decision was taken to restrict the allotment to 75 acre of land to each which was quite justified in view of the environmental requirements of retaining open area, etc. When enquired about various steps taken in safeguarding the interest of M/s. APIIC Lim....
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....s. Hetero Drugs Limited/M/s. Hetero Labs Limited in the group companies of Shri Y.S Jagan Mohan Reddy viz., M/s. Janani Infrastructure Private Limited in November, 2006 and December, 2006 till CB I registered the case." 2(a). The complaint thereafter in Para 14 as respective role of accused under PML Act concerned, at Clause (n) mentioned as follows: "Shri B.P Acharya was the Vice Chairman and Managing Director of M/s. APIIC Limited during the period from 2005 to 2009. Shri B.P Acharya, the then Vice Chairman & MD, M/s. APIIC Limited, in conspiracy and connivance with Shri Y.S Jagan Mohan Reddy and other accused persons abused his official position and shown undue favours to M/s. Aurobindo Group Companies and M/s. Hetero Group companies. The favours extended by him are allotment of 150 Acres of land and transfer of 30.33 Acre land in the name of M/s. Trident Life Sciences Limited from M/s. Aurobindo Pharma Limited, by violating the existing norms, regulations and procedures and caused wrongful loss of Rs. 21.50 Crore to M/S APIIC Limited. It is pertinent to mention that the Price Fixation Committee, which is the competent authority to fix the land prices, fixed the price as R....
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....ble under Section 4 of PMLA, 2002." 2(c). Along with the complaint there are Annexures A & B of which Annexure-A contains 53 documents and Annexure-B mentions 9 witnesses. In none of the documents covered by Annexure-A there is any sanction order to prosecute the petitioner admittedly and there is no any witness according sanction much less any letter addressing for sanction by competent authority referred are filed. 2(d). The contentions in the quash petition No. 3988 of 2016 to quash the proceedings in SC. No. 92 of 2016 by impugning said private complaint taken cognizance supra are that: Only on the basis of the case registered by CBI, ACB, Hyderabad Branch vide FIR. No. RC. 19(A)/2011-CBI-HYD on 17.11.2011, for offences punishable under Sections 420, 409, 477-A r/w 120-B and Sections 13(2) r/w 13(1)(c) and (d) of the Prevention of Corruption Act against Mr. Y.S. Jagan Mohan Reddy and others and in as much as the offence of Money Laundering under Section 3 of P.M.L. Act, 2002 is commissioned since the offences alleged under Sections 120-B r/w 420 IPC and Section 13 of the Prevention of Corruption Act are scheduled offences under P.M.L. Act, vide., enforcement case informat....
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....d, the PMLA does not contain any provision parallel to Section 197 of Cr.P.C and thus the procedure laid by the Cr.P.C. shall be followed and same was also considered by the High Court of Madhya Pradesh in Vijay Mandanlal Choudhary v. Union of India and others. It is also contended that in the parallel proceedings initiated against the petitioner-BP Acharya and others for offences punishable under IPC, the Government after careful consideration of the report of C.B.I has come to a conclusion that there is no financial misappropriation or financial gain or corruption by the petitioner and the State Government refused the sanction of prosecution U/Sec. 197 Cr.P.C. and as on today, no sanction has been obtained from the Government to prosecute the petitioner under Sections 3, 5, 8(5) of the P.M.L. Act and the cognizance ought not to have been taken against the petitioner. Therefore from want of sanction and the State Government vide. Lr. No. 59/SC.D/A1/2012-10, dated 08.10.2013, conveyed the fact of refusal of sanction under Section 197 Cr.P.C. to the Secretary, DoPT, while recommending the same to the Government of India to refuse sanction of prosecution under the Prevention of Corru....
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....hat too as submitted supra no sanction to prosecute is required under Sections 3 & 4 of PML Act and the contra contentions in the quash petition are incorrect and not sustainable and the judgments referred supra in the quash petition no way applicable to the prosecution on private complaint under PML Act and thereby the quash petition is to be dismissed by vacating the interim stay of the Sessions Case proceedings. 3. SC. No. 2 of 2018 is outcome of the private complaint of the Assistant Director, Directorate of Enforcement referred supra under Section 200 Cr.P.C. r/w 45 of the PML Act with array of 17 accused by names Sri YS Jagan Mohan Reddy-A1, Sri V. Vijay Sai Reddy-A2, Sri I. Syam Prasada Reddy-A3, M/s. Indu Projects Limited-A4, Ms/. Indu Techzone Private Limited-A5, M/s. SPR Properties Private Limited-A6, Ms/. Walden Properties Private Limited-A7, M/s. Bhoomi Real Estates Investments Private Limited-A8, M/s. Carmel Asia Holdings Private Limited-A9, Sri Nimmagadda Prasad-A10, M/s. G2 Corporate Services LLP (formerly known as M/s. G2 Corporate Services Limited)-A 11, Smt. P. Sabita Reddy-A12, Sri B.P. Acharya-A13, Sri D. Paradhasarhi Rao-A14, Sri C.V. Koteswara Rao-A15, M/s.....
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....e made to developers and major companies where more than 100 acres of land allotted, it was decided to charge a rate of Rs. 20 Lakh per acre for the present"; that, as per Clause 1.3 of the MOU entered into between M/S Indu Tech Zone private Limited and APIIC, as approved by the Council of Ministers, it was stipulated that the Government of Andhra Pradesh and APIIC agreed to transfer, vest and convey the project land to the company as per provisions, terms and conditions and rules & regulations of Government of India, SEZ Act, 2005, as applicable; that as per Clause 2 of the MoU, the terms for transfer of land shall be subject to the provisions of SEZ Act, 2005 and rules thereon; that Clause 2.14 of the MoU that the developer shall obtain all clearances under SEZ rules, which would be facilitated by the Government; that the very purpose of taking of the project was to facilitate notifications of IT SEZs near the new International Airport so as to attract investments and the Government as well as its nodal agency (APIIC) were expected to achieve SEZ status for this area as early as possible; that Rule 7 (1) of the Government of India, SEZ rules, stipulates that the developer shall f....
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....nment and that the obligations of the developer as per the MoU were not compromised in any manner." 3(a). So far as coming to the role of the individual accused mentioned in Para 79, the petitioner role is mentioned at clause (m) as follows: "Shri B.P Acharya was the Vice Chairman and Managing Director of M/s. APIIC Limited during the period from 2005 to 2009. Shri B.P Acharya, the then Vice Chairman & MD, M/s. APIIC Limited, in conspiracy and connivance with Shri Y.S Jagan Mohan Reddy and other accused persons abused his official position and shown undue favours to Indu Group Companies. The favours extended by him are allotment of 250 Acres of land for SEZ project to M/S Indu Tech Zone Private Limited, a group company of Indu group headed by Shri I. Syam Prasad Reddy, by violating the existing norms, regulations and procedures and caused wrongful loss to M/S APIIC Limited as well as to the Government of Andhra Pradesh to the tune of Rs. 80 Crore/- by decreasing the Land cost from Rs. 1 Crore to Rs. 20 Lakh per acre. It is pertinent to mention that the directions of Shri B.P Acharya to handover physical possession of lands before entering into the Sale Agreement without obtai....
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....e application of Cr.P.C. with regard to special enactment by interpreting Section 4(2) Cr.P.C. held that "In the absence of a specific provision made in the statute indicating that offences will have to be investigated, inquired into, tried and otherwise dealt with according to that statute, the same will have to be investigated, inquired into, tried and otherwise dealt with according to the Cr.P.C. In other words, Cr.P.C. is the parent statute which provides for investigation, inquiring into and trial of cases by criminal courts of various designations". It is also contended in relation to search, seizure and arrest PML Act provides for prescribed procedure under Sections 16, 17 & 19 of the Act respectively, however there is no specific or separate procedure for taking cognizance and conducting trial thereby provisions of Cr.P.C. to be followed with the procedure thereunder. It is also contended that the Apex Court three Judge Bench in State of UP v. Paras Nath Singh, it was observed that so far as the public servants concerned, cognizance of any offence by any Court is barred by Section 197 Cr.P.C. unless sanction is obtained from competent authority if the offences alleged to ha....
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....ed out by the learned senior Counsel Under Section 48, the guilt is deemed to be committed the moment the offence under the 1974 Act is alleged against the Head of the Department of a Government Department. It is a rebuttable presumption and under the proviso to Section 48, the Head of the Department will get an opportunity to demonstrate that the offence was committed without his knowledge or that in spite of due diligence to prevent the commission of such an offence, the same came to be committed. It is far different from saying that the safeguard provided under the proviso to Section 48 of the 1974 Act would in any manner enable the Head of the Department of the Government Department to seek umbrage Under Section 197 Code of Criminal Procedure and such a course if permitted to be made that would certainly conflict with the deemed fiction power created Under Section 48 of the 1974 Act. 9. In this context, when we refer to Section 5 Code of Criminal Procedure, the said Section makes it clear that in the absence of specific provisions to the contrary, nothing contained in the Code of Criminal Procedure would affect any special or local laws providing for any special form or proc....
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....be no justification for interference by the High Court..." It is further respectfully submitted that, in the case of State of Bihar Etc. v. P.P. Sharma, IAS and another (1991 AIR 1260, 1991 SCR (2) 1), the Apex Court held that: "The object behind prior sanction is to prevent malicious, vexatious and unnecessary harassment to a public servant by laying false or frivolous accusation or prosecution. In other words ss. 197(1), 15-A and related sections intended to immune a public servant who discharges his duties honestly and diligently from the threat of prosecution. Honest discharges of public duty would impinge adversely of the interests, acts or Omissions of private persons who would be prone to harass in criminal proceedings and prosecution to demoralise a public servant. The nexus between the discharge of the public duty and the offending act or omission must be inseparable. The obvious reason is to balance the public good and efficiency of the performance of the public duty by a public servant and the legitimate and bona fide grievance of an aggrieved person. Sometimes while discharging or purported to discharge the public duty, the officer may honestly exceed his limit....
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....State of Punjab, [1960] 2 SCR 89 this court held that the act of cheating or abatement thereof has no reasonable connection with the discharge of the official duty or that he did so in the course of performance of his duty. The same was reiterated in Harihar Prasad v. State of Bihar, [1972] 3 SCC 89." It is further respectfully submitted that, in the case of Jeewan Kumar Raut and another v. CBI (Criminal Appeal Nos. 1133-1134 of 2009), the Apex Court held that, "...TOHO being a special statute, Section 4 of the Code, which ordinarily would be applicable for investigation into a cognizable offence or the other provisions, may not be applicable. Section 4 provides for investigation, inquiry, trial, etc. according to the provisions of the Code. Sub-section (2) of Section 4, however, specifically provides that offences under any other law shall be investigated, inquired into, tried and otherwise dealt with according to the same provisions, but subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, tried or otherwise dealing with such offences. TOHO being a special Act and the matter relating to dealing with offences t....
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....along with penalty from M/S The India Cements Limited and sanctioned additional water to M/S The India Cements Limited. Thus, Shri Adityanath Das, directly involved in the offence of money laundering under Section 3 read with Section 4 of the PMLA, 2002 by knowingly assisted M/S The India Cements Limited and others in the creation of proceeds of crime and by assisting the said companies to project/claim the said Proceeds of Crime as untainted. He is therefore guilty of the offence of money laundering under Section 3 of PMLA, 2002 punishable under Section 4 of PMLA, 2002. 26. It is submitted that, in view of the above the said Movable/immovable properties total value of Rs. 232,27,55,806/- (Movable Properties - Rs. 225,96,99,555/- and Immovable Properties - Rs. 6,30,56,251/-) confirm to the definition of proceeds of crime as defined under Section 2(1)(u) of PMLA, 2002 as "proceeds of Crime" means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property". 27. It is submitted that from the statements of the Accused herein and documents collected during the course ....
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....the country, then the property equivalent in value held within the country." Section 4 of PMLA. 2002 "Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment/or term which shall not be less than three years but which may extend to seven years and shall be liable to fine, PROVIDED that where the proceeds of crime involved In money-laundering relates to any offence specified under paragraph 2 of Part A of the schedule, the provisions of the section shall have effect as if for words "which may extend to seven years ", the words "which may extend to tenyears " had been substituted Schedule is defined under Section of the PMI-A, 2002 as follows: Schedule means the schedule to this Act', Scheduled offence is defined under Section 2(1)(y) of the PMLA, 2002 as follows: "Scheduled Offence" means- (i) the offences specified under Part A of the Schedule; or (ii) the offences specified under Part B or the Schedule if the total value involved in such offences is thirty lakh rupees or more; or [deleted vide amendment act, 2013] (iii) the offences specified under Part C of the Schedule "Person" as defined under section....
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....h the consent or connivance of, or is attributable to any neglect on the part of any director, manager, secretary or other officer of any company, such director, manager, secretary or other officer shall also be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly. Explanation I: For the purposes of this section,- (i) "Company" means anybody corporate and includes a firm or other association of individuals; and (ii) "director ", in relation to a firm, means a partner in the firm. Explanation 2: For the removable of doubts, it is hereby clarified that a company may be prosecuted, notwithstanding whether the prosecution or conviction of any legal juridical person shall be contingent on the prosecution or conviction of any individual. Section 71 of PMLA. 2002 Section 71: Act to have overriding effect. The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. 30. It is humbly submitted that from the statements of the Accused herein and documents collected during the course of investigation under PMLA, it is well establi....
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.... was no illegality much less procedural irregularity and the allocation of water to India Cements-A7 and despite it the Assistant Director of Enforcement, Government of India filed the private complaint for the alleged offence of cheating under Section 3 & 4 PML Act alleging as Secretary of I & CAD as if conspired with other accused by abusing his post by undue favour by violating norms and regulations and in causing loss to the Government by alleging as if therefrom involved in the offence of money laundering by assisting A.7 and others for those among others to claim the proceeds of crime as untainted and the Special Judge should not have taken cognizance for the offences under Section 3 & 4 of the PML Act and the cognizance order saying perused the records and complaint taken on file as SC. No. 2 of 2017 against A. 1 to A. 10 under Section 4 r/w 3 of the Act in ordering to issue summons is untenable, that he is innocent and unnecessarily charge sheeted by filing complaint to take cognizance supra by Special Court that is liable to be quashed. He referred Sections 2, 3, 4 & 24 of the PML Act in saying to attract the offence of money laundering knowledge of indulgence of a person ....
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....ts of any lack of knowledge or non-privy of the petitioner, by saying those are untrue and set up for the quash petition purpose, that there is a prima facie case against him also that was rightly taken cognizance and no sanction is required, by reiterated with no need of reproduction what are the contentions raised in the other 2 quash petitions and thereby the quash petition is liable to be dismissed. 4(d). The reply affidavit of the quash petitioner in the writ petition in reply to the counter of the Assistant Director is by denying those contentions and by saying the contention of writ petition is not maintainable is not correct for same is maintainable and earlier questioning the complaint filed under PML Act, WP. No. 17525 of 2014 filed before this Court by some of the accused therein that was allowed on 22.12.2014 and even the Directorate of Enforcement preferred appeal before the Supreme Court against said writ petition went unsuccessful therein also, thereby estopped from questioning of maintainability of the writ petition and it is also stated the contention of he was not discharging official duties is not correct so also of the allegation of he is responsible for the ....
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....er as per the recommendation contained in Bachavat River Water Tribunal and the allotment of Kagna basin is governed by recommendations of Bachavat Tribunal, where under AP's share was limited to 6 TMC as river Kagna is a minor stream and it is tributary to River Bheema and not of Krishna and as per G.O. Ms. No. 195 dated 22.03.1979 for rivers other than Krishna and Godavari and its tributaries, the CE Minor Irrigation is the authority designated to deal with the streams and rivers which are not Inter State Rivers and thereby the water allocation was as per procedure.prescribed and not by any violations. The Advisors of the Government over see the functions of the Advisory Committee and give their suggestions and feed back on technical matters constituted and the petitioner followed by the procedure laid down by the SIPB and the industrial policy enumerated in G.O. Ms. No. 178 dated 21.06.2005 and contra allegations in the counter are baseless. The counter affidavit by the Assistant Director to the additional ground on want of sanction is nothing new to what is there in the counter affidavit averments in the other 2 quash petitions referring to proposition and provisions in say....
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....aid allotment and that too when it is a renewal of the old allotment with extra quantity from Krishna and Kagna rivers to India cements and that too from the proposal came from Superintending Engineer, Irrigation Circle after arrears realized of the water royalty, for no involvement of money laundering much less with intention or knowledge much less commission of money laundering or aiding or abetting any others to have benefit and sanction for prosecution refused by Central and State Governments to the CBI of PC Act and IPC offences respectively earlier sought by CBI against the petitioner from the say of no any irregularity and no loss to the Government, that required to be considered with reference to any offence of money laundering defined in Section 3 of the Act which speaks whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting or claiming it as untainted property shall be guilty of offence of money-laundering that is punishable under Section 4 of the Act with different punishments for the advance specified in Part-A of the schedule....
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....dity is upheld for others time and again and thereby from its reading with reference to Sections 46, 65 & 71 of the Act no prior sanction even to prosecute a public servant is required for any of the three petitioners in the three matters respectively even they are public servants in the cadre of IAS officers and even taken their acts are in discharge of their official duties in their say of Section 197 Cr.P.C. has no application even for taking cognizance by the special Court. In reply to the above, the contention of the learned counsel for the petitioners is that sanction is mandatory under Section 197 CrPC to take cognizance. 8. As the main issue now to answer therefrom is requirement or non-requirement of any sanction to take cognizance for the offences against the officials as accused, it is thereby taken up to decide. For that it is to be seen whether the Act is a complete code covering all areas as contended and if not to what area with reference to Sections 4 & 5 Cr.P.C. the provisions of Cr.P.C. as general law either specially made applicable by the special provisions or from its silence so to apply unless shown deemed not applicable and then how far the contentions of ....
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....roblem together concluded on 8 to 10 June, 1998, has made another declaration regarding the need to combat money-laundering. India is a signatory to this declaration. In view of an urgent need for the enactment of a comprehensive legislation inter alia, for preventing money-laundering and connected activities, confiscation of proceeds of crime, setting up of agencies and mechanisms for coordinating measures for combating money-laundering, etc., the Prevention of Money-laundering Bill, 1998 was introduced in the Lok Sabha on the 4th August, 1998. The Bill was referred to the Standing committee on Finance, which presented its report on the 4th March, 1999 to the Lok Sabha. The recommendations 'of Standing Committee accepted by the Central Government are: (a) the expressions ' banking company' and 'person' may be defined; (b) in Part I of the Schedule under Indian Penal Code, the word, 'offence'. under section 477A relating to falsification of accounts should be omitted; (c) 'knowingly' be inserted in clause 3(b) relating to the definition of money-laundering; (d) The banking companies, financial institutions and intermediaries sho....
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....ned through illegal and criminal activities by investments in movable and immovable properties. The need for a law on the subject has been the focus of the Government world over in recent times and that of the U.N. also, because the scourge of money-laundering has threatened to wreck the foundations of the States and undermine their sovereignty even. The terrorist outfits and smuggling gangs have been depending upon money laundering to finance their operations and it is known that money for such operations are arranged through laundering. Many such illegal outfits have set up ostensibly legal front organization. The money generated through illegal activities is ultimately inducted and integrated with legitimate money and its species like movable and immovable property. Thus certain economic offences, commercial frauds, crimes like murder, extortion have contributed to money-laundering in a significant manner. The perpetrators of such heinous crimes should not be allowed to enjoy the fruits of the money that passed under the activity and therefore the present enactment is intended to deprive the property which is related to the proceeds of specific crimes listed in the Schedule to t....
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....ence under this Act or any of the scheduled offences. 2(1)(y) "scheduled offence" means- (i) the offences specified under Part A of the Schedule; or (ii) the offences specified under Part B of the Schedule if the total value involved in such offences is thirty lakh rupees or more; or (iii) the offences specified under Part C of the Schedule 2(1)(z) "Special Court" means a Court of Session designated as Special Court under sub-section (1) of section 43; 2(1)(za) "transfer" includes sale, purchase, mortgage, pledge, gift, loan or any other form of transfer of right, title, possession or lien; 2(1)(zb) "value" means the fair market value of any property on the date of its acquisition by any person, or if such date cannot be determined, the date on which such property is possessed by such person. IN CHAPTER II: OFFENCE OF MONEY-LAUNDERING (Sections 3 & 4) Sec. 3 Offence of money-laundering: Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it....
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....g), on the basis of material in his possession, that if such property involved in money-laundering is not attached immediately under this Chapter, the non-attachment of the property is likely to frustrate any proceeding under this Act. (2) The Director, or any other officer not below the rank of Deputy Director, shall immediately after attachment under sub-section (I), forward a copy of the order, along with the material in his possession, referred to in that sub-section, to the adjudicating Authority, in a sealed envelope, the manner as may be prescribed and such Adjudicating Authority shall keep such order and material for such period as may be prescribed. (3) Every order of attachment made under sub-section (1) shall cease to have effect after the expiry of the period specified in that sub-section or on the date of an order made under sub-section (2) of Section 8, whichever is earlier. (4) Nothing in this section shall prevent the person interested in the enjoyment of the immovable property attached under sub-section (1) from such enjoyment. Explanation: for the purposes of this sub-section, "person interested," in relation to any immovable property, includes all per....
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....shall by an order in writing, confirm the attachment of the property made under sub-section (1) of Section 5 or retention of property or record seized under Section 17 or section 18 and record a finding to that effect, such attachment or retention of the seized property or record shall- (a) continue during the pendancy of the proceedings relating to any scheduled offence before a court; and (b) becomes final after an order of confiscation is passed under sub-section (5) or sub-section (7) of Section 8 or Section 58B or sub-section (2A) of Section 60 by the Adjudicating Authority. (4) Where the provisional order of attachment made under sub-section (1) of Section 5 has been confirmed under sub-section (3), the Director or any other officer authorized by him in this behalf shall forthwith take the possession of the property attached under Section 5 or frozen under sub-section (1A) of Section 17, in such manner as may be prescribed: Provided that if it is not practicable to take possession of property frozen under sub-section (1A) of Section 17, the order of confiscation shall have the same effect as if the property had been taken possession of. (5) Where on conclusion ....
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....RES. ETC:- (Sections 16 to 24) Section 22. Presumption as to records or property in certain cases.- 1. Where any records or property are or is found in the possession or control of any person in the course of a survey or a search. or where any record or property is produced by any person or has been resumed or seized from the custody or control of any person or has been frozen under this Act or under any other law for the time being in force, it shall be presumed that i. such records or property belong or belongs to such person: ii. the contents of such records are true: and iii. the signature and every other part of such records which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by. or to be in the handwriting of 'any particular person, are in that person' handwriting, and in the case of a record-stamped. executed or attested, that it was executed or attested by the person by whom it purports to have been so stamped. executed or attested. 2. Where any records have been received from any place outside India, duly authenticated by such authority or person and in such manner as may be prescr....
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.... to in sub-section (1), with which the accused may under the Code of Criminal Procedure, 1973 (2 of 1974). be charged at the same trial. Section 44. Offences tribal by Special Courts: 1. Notwithstanding anything contained in the Code of Criminal Procedure, 1973(2 of 1974), a. an offence punishable under section 4 and any schedule offence connected to the offence under that section shall be triable by the Special Court constituted for the area in which the offence has been committed: Provided that the Special Court, trying a scheduled offence before the commencement of this Act, shall continue to try such scheduled offence; or b. a Special Court may [***] upon a complaint made by an authority authorised in this behalf under this Act take cognizance of the offence under section 3, without the accused being committed to it for trial. c. If the Court which has taken cognizance of the scheduled offence is other than the special court which has taken cognizance of the complaint of the offence of money laundering under Sub-Clause (b), it shall, on an application by the authority authorised to file a complaint under this Act, commit the case relating to the scheduled offe....
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....tral Government by a general or special order, and, subject to such conditions as may be prescribed. 2. The limitation on granting of bail specified in [***] sub-section (1) is in addition to the limitations under the Code of Criminal Procedure, 1973 (2 of 1974) or any other law for the time being in force on granting of bail. Section 46. Application of Code of Criminal Procedure, 1973 to proceedings before Special Court.- 1. Save as otherwise provided in this Act, the provisions of the Code of Criminal Procedure, 1973 (2 of 1974) (including the provisions as to bails or bonds), shall apply to the proceedings before a Special Court and for the purposes of the said provisions, the Special Court shall be deemed to be a Court of Session and the persons conducting the prosecution before the Special Court, shall be deemed to be a Public Prosecutor: Provided that the Central Government may also appoint for any case or class or group of cases a Special Public Prosecutor. 2. A person shall not be qualified to be appointed as a Public Prosecutor or a Special Public Prosecutor under this section unless he has been in practice as an advocate for not less than seven years, under....
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....he proceeds of the crime and projecting it as untainted property and on proof of guilt for punishment of the offenders of Money-Laundering, as provided in Section 4 of the Act, that would follow after a due cognizance of the offence with pre-trial enquiry if any and trial by the Special Court; which is conferred exclusive jurisdiction qua Section 44, Chapter VII of the Act. The prosecution, trial and conviction for the offence of Money-laundering are thus the criminal sanction administered by the Legislation and effectuated by a deprivation of personal liberty as a disincentive to a malfeasant. In this regard while upholding the constitutional validity of the provisions of the Act, in B. Rama Raju v. Union of India, Mini...the Division Bench of the then Composite Andhra Pradesh High Court on 4th March, 2011 in Writ Petition Nos. 10765, 10769, 23166 of 2010 (6) 2011 (3) ALT 443 (DB) held as follows: "While the offence of money-laundering comprises various degrees of association and activity with knowledge and information connected with the proceeds of crime and projection of the same as untainted property with mensrea; for the purposes of attachment and confiscation (imp....
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....ed transactions that where money laundering involves two or more inter-connected transactions and one or more of such transactions is or are proved to be involving in money-laundering, then for the purposes of adjudication or confiscation under Chapter-III, the Act enjoins a rebuttable presumption that the remaining transactions form part of such interconnected transactions. From the scheme of the provisions of the Act, it is apparent that, a person accused of an offence under Section 3 of the Act whose property is attached and proceeded against for confiscation must advisedly indicate the sources of his income, earnings or assets, out of which or means by which he has acquired the property attached, to discharge the burden (Section 24) that the property does not constitute proceeds of crime. Where a transaction of acquisition of property is part of inter-connected transactions, the onus of establishing that the property acquired is not connected to the activity of money-laundering, is on the person in ownership, control or possession of the property, though not accused of a Section 3 offence, provided one or more of the interconnected transactions is or are proved to be i....
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....er as a Benami or as a mere name-lender or as a bona fide transferee for value or in any other manner. He cannot claim those properties and must surrender them to the State under the Act. Since he is a relative or associate, as defined by the Act, he cannot put forward any defence once it is proved that that property was acquired by the detenu - whether in his own name or in the name of his relatives and associates. The Court further observed : By way of illustration, take a case where a convict/detenu purchases a property in the name of his relative or associate - it does not matter whether he intends such a person to be a mere name lender or whether he really intends that such person shall be the real owner and/or possessor thereof- or gifts away or otherwise transfers his properties in favour of any of his relatives or associates, or purports to sell them to any of his relatives or associates - in all such cases, all the said transactions will be ignored and the properties forfeited unless the convict/detenu or his relative/associate, as the case may be, establishes that such property or properties are not "illegally acquired properties" within the meaning of Section 3(c). In th....
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.... an offence under Section 3 (Section 24) and the presumptions in inter-connected transactions (Section 23), it is clear that what is targeted for confiscation is proceeds of crime in the ownership, control or possession of any person and not all property or proceeds of all crime in the ownership, control or possession of any person. Again, in Smt. Heena Kausar v. Competent Authority 2008 (7) SCALE 331 the validity of the proviso to Section 68-C of the Narcotic Drugs and Psychotropic substances Act, 1985, (NDPS Act, 1985), prior to its amendment by Central Act 9 of 2001 fell for the consideration of the Supreme Court. Dealing with the challenge the Supreme Court observed: "...The purported object for which such a statute has been enacted must be noticed in interpreting the provisions thereof. The nexus of huge amount of money generated by drug trafficking and the purpose for which they are spent is well known... Necessity was felt for introduction of strict measures so that money earned from the drug trafficking by the persons concerned may not continue to be invested, inter alia, by purchasing moveable or immoveable properties not only in his own name but also in the names of his n....
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....d must be considered as components of a statutory symphony that elucidate the true scope of the onus probandi and the burden of proof. **************** In Raghavanna v. Chenchamma AIR 1964 SC 136, Subba Rao, J. (as his Lordship then was) again explained the distinction between burden of proof and onus:... There is an essential distinction between burden of proof and onus of proof: burden of proof lies upon the person who has to prove a fact and it never shifts, but the onus of proof shifts. The burden of proof in the present case, undoubtedly lies upon the plaintiff to establish the factum of adoption and that of partition. The said circumstances do not alter the incidence of the burden of proof. Such considerations, having regard to the circumstances of a particular case, may shift the onus of proof. Such a shifting of onus is a continuous process in the evaluation of evidence. ***************** " Thus, but for Section 45(1)(ii) of the Act, where from the Public Prosecutor on notice once opposes the application for bail, bail cannot be granted to accused of the offence under Section 3 of the Act unless the court is satisfied that there are reasonable grounds beli....
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....regard, the Apex Court in State of Punjab v. Balbir Singh (1994) 3 SCC 299 on the scope of Sections 4 & 5 Cr.P.C. r/w Sections 41 to 43 & 51 of NDPS Act and Sections 100, 102 & 165 Cr.P.C. observed that NDPS Act is not a complete code incorporating all the provisions relating to search, seizure or arrest etc.. and the words in so far as they are not inconsistent with the provisions of the Act are significant enough worded in the Section 51 of the Act say that the provisions of Cr.P.C. as per Section 4 of the code shall be applicable in so far as they are not inconsistent with the NDPS Act from the combined reading of the provisions for the reason Section 4(2) Cr.P.C. provides that all the offences under any other law shall be investigated and inquired into, tried and otherwise dealt with according to the same provisions (of Cr.P.C.) but subject to any enactment for the time being in force regulating the manner or place of investigation, inquire into, or try or otherwise dealing with such offence. It is incorporated clearly particularly in the expression at Para 5 in use of the words otherwise deal with it is not necessarily mean something which is not included in the Act but for po....
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....icable from the expressions supra that what even the Constitution Bench expression in AR Antulay supra laid down as referred supra and quoted with approval in the expressions supra. 11. Before undertaking further discussion, coming back to the other provisions of the Act, Section 44(1)(b) speaks that notwithstanding anything contained in Cr.P.C. the special Court may upon complaint made by an authority authorized in this behalf by the Act take cognizance of the offence under Section 3 without accused is committed to it for trial. The special Court's power of taking cognizance without committal is provided thereby irrespective of what is contained in Cr.P.C. and nothing beyond, much less to construe other provisions of the code for taking cognizance no way applicable. In fact from the silence in the provisions for nothing in the Act provisions inconsistent to the code from the reading of Section 4(2) of the code with the provisions supra. Section 197 Cr.P.C. sanction for taking cognizance is a pre-requisite to proceed against a public servant. Thus it does not mean if at all sanction to prosecute otherwise is required to take cognizance, no way required because not specifical....
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....and with reference to Sections 43 to 46 of the Act in general with Section 4(2) of the Code and the expressions referred supra, the provisions of the Code is applicable to the investigation, prosecution and other proceedings under the Act save to the extent not specifically provided inconsistent therewith that what the expressions referred supra laid down right from the constitution bench expression in AR Antulay supra on the scope of law. The expression besides prosecution all other proceedings under this Act in applying the Code where the Act is silent and not inconsistent with from its provisions is very clear that the Act is not a complete code and provisions of Cr.P.C. apply where the act is silent in the area from Section 46 and even otherwise so far as the prosecution and all other proceedings not specifically provided in the Act the provisions of the code specifically made applicable by virtue of this Section 65 of the Act. Thus once there is no procedure specifically provided for prosecution but for simply saving on the complaint to take cognizance under Section 44(1)(b) of the Act it cannot be contended no sanction to take cognizance is required if otherwise sanction is r....
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....ncerned and as a consequence automatic coming to play of Section 60 of the Act with overriding effect over any other enactment other than the Act there is no scope for invoking Section 197 Cr.P.C. even if the appellants were the public servant was the conclusion. In fact that expression confined to its own facts and mainly by placing reliance upon Section 60 of the Act and the same cannot be equated with Sections 23 & 24 of PML Act. As per the expression in VC Chinnappa Goudar supra there is a legal fiction of committing the offence by the Head of the Department of the Government to punish by Section 60 of the Act and no such fiction but for only a rebuttal presumption with reverse onus clause at best that too on showing the accused got prima facie knowledge in money laundering to constitute an offence under Section 3 of the Act that to be established by prosecution and as such the proposition has no application to say by the learned counsel for the Directorate of Enforcement of no sanction of the public servant to prosecute under the PML Act is required to take cognizance or to proceed for post cognizance enquiry and trial for the offence under Section 3 & 4 of the Act. In fact th....
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.... to the single judge expression of the Sikkim High Court in Smt. Usha Agarwal v. Union of India 2018 Crl.L.J. 691 placed reliance on Paras 58 to 61 of the judgment discussed therein particularly Sections 23, 24 & 45 of the Act r/w 101 & 102 of the Evidence Act and Sections 437 & 439 Cr.P.C. in relations to the grant of bail, it is categorically observed that the presumption envisaged for burden of proof in Section 24 of the Act is a rebuttal presumption to afford opportunity to the accused to establish that the property in his favour or the value of any such property acquired is by legal means and not by any illegal methods and it will not comprise any offence under Section 3 of the Act or to explain the source of the property in his possession so that the burden shifts on the prosecution to rebut the said evidence and in view of that said provision no way can be called unconstitutional including making the special penal provision a non-bailable offence by Section 45 of the Act by referring to the provisions of the NDPS Act in this regard to that conclusion. 19. Coming to the other expression placed reliance by them of the Apex Court in Gautam Kundu v. Directorate of Enforcement....
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.... pleas at any point of time including even in hearing the appeal before the appellate Court of requirement of sanction and without which the cognizance taken is no way to survive. Same was the conclusion arrived by the Apex Court in State of Goa v. Babu Thomas that taking of cognizance by a Court against a public servant of the alleged offence connected with his duty without sanction is incompetent and the error was so fundamental that invalidates the proceedings right from the stage of cognizance and the Apex Court in State of Harayana v. Bhaian Lal AIR 1992 SC 604 : 1992 Supp (1) SCC 335 at Paras 101 & 102 laid down the guidelines one of which includes quashing of the proceedings for want of sanction as bar of law. 21. Coming to the contention of learned counsel Sri Manmadharao by placing reliance on the three judge bench expression of the Apex Court in SS Dhanoa v. Municipal Corporation Delhi AIR 1981 SC 1395, his contention on behalf of Directorate of Enforcement is that the APIIC Managing Director-cum-Chairman is not a public servant under Section 21 IPC. In the expression in SS Dhanoa, what was observed is that employee of super bazaar a cooperative society is not a public....
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....wn in Vineet Narain within three months with any consultation outer limit of one month if at all to consult AG or other law officer of AG with reference to CVC guidelines 2005 and the private party seeking sanction must be informed of the decision on sanction application to enable him to avail appropriate remedy if not satisfied with the decision not according sanction. The person against whom the sanction is to be accorded need not be given any opportunity of hearing for according sanction but for to take a decision on the material placed by application of mind to the material. What is observed of when sanction under Section 19 of PC Act applies not in dispute, however the scope of Section 197 Cr.P.C. is different to Section 19 of PC Act undisputedly and also as referred therein. It was discussed in Para 64 of the judgment that from prosecution by taking of cognizance is barred from want of sanction proceeded without sanction. It is however observed that under the PC Act if a special provision is made on a certain matter that matter is excluded from the general provisions in Cr.P.C. and the provisions of Section 19 PC Act will not have an overriding effect on general provision of ....
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.... law. (b) to pursue (a person) by legal proceedings for redress or punishment; to proceed against judicially; espy., to accuse of some crime or breach of law, or to pursue for redress or punishment of a crime or violation of law, in due legal form before a legal tribunal; as, to prosecute a man for trespass, or for a riot." According to Wharton's Law Lexicon, 14th edn., p. 810, "prosecution" means "a proceeding either by way of indictment or information, in the criminal courts, in order to put an offender upon his trial. In all criminal prosecutions the King is nominally the prosecutor." This very question was discussed by this Court in the case of Maqbool Hussain v. The State of Bombay (AIR 1953 SC 325), with reference to the context in which the word " prosecution " occurred in Art. 20. In the course of the judgment, the following observations, which apply with full force to the present case, were made:-".......and the prosecution in this context would mean an initiation or starting of proceedings of a criminal nature before a court of law or a judicial tribunal in accordance with the procedure prescribed in the statute which creates the offence and regulates the procedure." ....
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....ly bars taking of cognizance by the Court without previous sanction of any offence against a public servant as accused of any offence alleged to have been committed by acting or purporting to act in discharge of his official duty. Thus sanction under Section 197 Cr.P.C. is prerequisite to take cognizance of the offence under Section 3 of the PML Act against the public servant shown as accused of said offence in the private complaint filed by the competent authority before the special Court. 28. In Harshad S. Mehta v. State of Maharastra (2001) 8 SCC 257 : 2002 (1) ALT 15.4 (DN SC) at Para 15 it is observed in interpretation of the provisions of the code and the special Court and Sections 9, 4, 6, 7 & 13 of Transactions in Securities Act, 1992 on the application or not of the procedure under Sections 306 & 307 Cr.P.C. to grant pardon to an accused of the Act offences at any stage of the proceedings. It is observed that as there is no inconsistency or repugnancy between the Act supra and code supra and there is no implead or express repeal of Sections 306 & 307 of the code and the Act provisions, the Code thereby harmoniously be construed to borrow the legs from the code to the Ac....
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....particularly for the special court to take cognizance which is lacking in the case on hand and for want of sanction the cognizance orders respectively of the learned Special Judge are no way sustainable and are liable to be set aside. 31. On the scope of requirement of sanction under Section 197 Cr.P.C. and it's marked difference with Section 19 of PC Act, this Court in LV Subrahmanyam supra dealt with in detail particularly at Paras 44 & 45 and negated as untenable the contention of the learned Special Public Prosecutor for CBI of validity or otherwise of sanction and requirement or not is a matter to be considered in trial, by answering the scope of law in this regard from Paras 47 to 49 in saying once it is noticed about the sanction is required and it is brought to the notice of the Court of the prosecution no way sustains for want of sanction the continuation of the proceedings is nothing but abuse of process and to sub serve the ends of justice the inherent power or writ jurisdiction has to be invoked in saying ends of justice are more important and Court cannot shut its size when brought to the notice of the Court any abuse of process leading to injustice, but for inv....
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....cated under this Chapter Power regarding summons, production of documents and evidence, etc. Obligations of Banking Companies, Financial Institutions and Intermediaries Banking companies, financial institutions and intermediaries to maintain records Powers of Director to impose fine No civil proceedings against banking companies, financial institutions, etc., in certain cases Procedure and manner of furnishing information by banking company, financial institution and intermediary Summons, Searches and Seizures, Etc. Power of survey Search and seizure Search of persons Power to arrest Retention of property Retention of records Presumption as to records or property in certain cases Presumption in inter-connected transactions Burden of proof Appellate Tribunal Establishment of Appellate Tribunal Appeal to Appellate Tribunal Composition, etc., of Appellate Tribunal Qualifications for appointment Term of office Conditions of service Vacancies Resignation and removal Member to act as Chairperson in certain circumstances Staff of Appellate Tribunal Procedure and powers of Appellate Tribunal Docum....